I've been given an offer should I take a co-op or contract?

I think i’ve been offered a position of some sort with a company. I think. anyway, they have mentioned the possibility of either a co-op for 3 months or contracting work out when needed. What are some questions I should be asking, or what should I be thinking about before I reply. Pay has not been talked about yet. Things also look promising for a few other studios for a contract work in the area, am I limiting my options by taking a full time position or should I do contract work for various firms?

I think you should find out if you have an offer or not. Whatever they said is meaningless unless you have recieved a written and dated contract/offer. Get something in writing spelling out all the details first (including pay). If they give you grief because you asked for it in writing, chances are you probably don’t want to work with them anyways - its a sign of not-so-professional or ethical practices.